Touch ID Payments Are The Secret Sauce For Apple E-Commerce

The  technology giant is going all-in on the future of Apple e-commerce. Apple has announced their touch-to-pay technology, Apple Pay, would now be available on new MacBooks, Apple TV, and in your Safari browser. So why is this such a big deal?

Shopify is reporting a 200% increase in conversion for retailers using Apple Pay. Apple already represents 75% of all contactless payments made in the Unites States. Apple Pay transactions are also growing 500% year-over-year. In fact, more purchases were made through Apple Pay in September 2016 than the entire 2015 year. Mobile commerce sales are increasing every year by a substantial amount:

Mobile Apple Ecommerce Sales

More people are using their phones to shop. Apple e-commerce growth is predicated on their hardware working well with their software. Unlike other mobile wallets, Apple Pay continues to grow. The addition of mobile wallet to Safari will change how we shop and search for products online. We’ve already seen a rise in digital payments made with mobile wallets.

By 2020, the size of mobile wallets is expected to reach $266 billion:

graph of digital payments for apple e-commerce

With Apple Pay, in one touch shoppers can now bypass those frustrating forms and payment information sheets. Retailers are using alternative payment methods to satisfy their shoppers and Apple Pay has been their #1 choice so far. Unlike with credit card issuers, Merchants don’t pay anything to Apple for Apple Pay.

On mobile, the focus has shifted from creating apps to optimizing their mobile website’s checkout process.  Moovweb’s founder and CEO Ajay Kapur believes retailers turn to Apple Pay to help optimize their mobile website:

in 2016, an increasing percentage of retailers will incorporate seamless payment services, like Apple Pay, into their mobile Web checkout pages. Moovweb’s Kapur said that quick fixes for clunky checkout pages include fewer form fields and a cleaner user experience.

“People have a bad checkout experience once, and they remember that poor experience,” said Kapur. “A very small fix, like eliminating a redundant entry field, gets results.”

Mobile e-commerce makes up 19% of digital e-commerce spending. Apple devices were responsible for 97% of mobile commerce revenue in Q2 this year, 57% from iPhone alone. Smartphone’s converted 1.43% in Q4 of 2014 compared to a 4.66% rate on desktop according to Smart Insights.  Mobile traffic has surpassed desktop, but mobile conversion is dragging far behind.

Apple may have the solution to fix these poor mobile web conversion rates:

developers that have implemented Apple Pay in the recommended way have doubled their checkout conversation rates, substantially reduced checkout time, increased customer loyalty, and increased purchase frequency after integrating Apple Pay.

39% of mobile traffic came from organic search last quarter. If that amount of traffic could convert at 2x (like Apple claims) the rate, you’re looking at a substantial revenue increase. This encourages shoppers to use Safari to search for the product because they know checking out will be easy inside the browser. This could be a major factor for Apple’s e-commerce success. 50% of shoppers search for a product on Amazon first. If more people prefer to use Apple Pay there will be more searches inside of Safari, possibly cutting into Amazon’s product search domination.

Mobile shopping carts are abandoned 97% of the time. $24.5 Billion was abandoned in shopping carts just last year. 36% of mobile shoppers abandoned their cart because of a slow or difficult checkout process. Now that Apple Pay can be used for online transactions, mobile cart abandonment should drop.  Apple has identified a problem and just might have solved it. Unlike Visa Paypass, Apple has the hardware to make it’s payment method work. Touch ID was once thought as a security addition. However, it is now the secret sauce in the Apple e-commerce strategy.

Apple’s annual sales fell this year for the first time since 2001. The smartphone market is saturated, and that’s why Apple bet big on e-commerce. We will be keeping a close eye on Apple Pay conversion data for the next several months. All indications are this will be a home run for Apple.

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